2023 (2) TMI 744

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....e assessee has raised the following grounds:- "(a) The Commissioner of Income Tax(Appeals), National Faceless Appeal Centre, Delhi [CM(A)'] erred in confirming disallowance of Rs.12,16,766/- us 43B of the IT Act on account of Provision for Gratuity, made by the Assistant Director of Income Tax(CPC), Banglore (AO) holding it as disallowance of expenditure indicated in the tax audit report but not taken into account in computing the total income in the return of income. The Appellant submits that it has already made disallowance of Provision of Gratuity of Rs. 12,86,458/- [i.e. Rs.12,16,766+ Rs.69,692] in its return of income although inadvertently u/s 40A(7) of the Act as against us 43B of the IT Act as indicated by the Tax Auditor ....

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....he said amount payable for gratuity was not paid on or before the due date of filing of return of income. Once, a Tax Auditor suggests some disallowance u/s 43B of the Act, it is incumbent on the assessee to make that disallowance while filing the return of income. However, the appellant has not done so. The appellant has now submitted that this amount is included in the disallowance of Rs. 12,86,458/- already made by him. The appellant has submitted that this amount of Rs. 12,86,458/- consist of two amounts i.e. provision for gratuity of Rs. 12,16,766 and gratuity payment of Rs. 69,692/- made to Mr. Mayur Thakur who left the organization during the year and in this manner, the appellant itself disallowed an amount of Rs. 12,86,458/- as per....

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....d by the appellant is PARTLY ALLOWED." Being aggrieved, the assessee is in appeal before us. 5. During the hearing, the learned Authorised Representative ('learned AR') submitted that the tax auditor in its report did not disallow any amount under section 40A(7) of the Act. However, inadvertently the assessee while filing its return of income mentioned an amount of Rs.12,86,458, as provision for payment of gratuity disallowable under section 40A(7) of the Act. Further, the learned AR submitted that as regards the sum not paid on or before the due date for furnishing the return of income for the purpose of section 43B of the Act, the auditor in its report mentioned the amount of Rs.12,16,766. However, inadvertently the assessee while fili....

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.... perusal of the return of income, we find that the assessee disallowed an amount of Rs.12,86,458 as the provision for payment of gratuity under section 40A(7) of the Act and mentioned nil against the amount disallowable under section 43B of the Act. Since the disallowance indicated in the audit report in respect of section 43B of the Act was not taken into account in computing the total income in the return by the assessee, vide intimation issued under section 143(1) of the Act disallowance under section 43B of the Act was, inter-alia, made. It is the plea of the assessee that the disallowance as reported in the tax audit report was not taken into account while filing the return of income due to inadvertence. Further, as per the assessee, i....